NLRB follows the General Counsel’s Lead: Enhanced Remedies May Now Apply to Bad-Faith Bargaining

  • In Noah’s Ark, the Board combined remedies it can impose on an employer that engaged in repeated unfair labor practices.
  • The decision may predict the expansion of remedies for bad-faith bargaining.
  • The decision follows the trend of increasingly punitive and extraordinary remedies being implemented by the Board.

On April 20, 2023, a three-member panel of the National Labor Relations Board (Board) ruled 2-1 in Noah’s Ark Processors LLC, 372 NLRB No. 80 (2023), that a combination of remedies imposed for unfair labor practices by an administrative law judge (ALJ) were not only warranted but did not go far enough.1 In Noah’s Ark, a Nebraska meat processer engaged in protracted bargaining for five years for a successor contract with the UFCW. Since 2019, the parties had litigated union accusations that the employer continuously and repeatedly violated sections 8(a)(1), (3) and (5) of the National Labor Relations Act (NLRA or “the Act”) in a multitude of ways. 

With the unique fact pattern present in Noah’s Ark, the Board took the opportunity to issue a ruling in which it reinforced the remedies ostensibly available to the Board under Section 10(c) of the Act. The Board also described the remedies it considers available when dealing with a recalcitrant party that refuses to comply with or respect the Act.

Noah’s Ark reinforces the NLRB’s Office of the General Counsel’s agenda of getting the Board to impose expanded and more severe remedies for unfair labor practices.  Noah’s Ark focuses on expanded remedies available for allegedly unlawful behavior in bargaining.  The majority opinion asserts that the Board has broad discretion to exercise its remedial authority and that the Board can and should tailor remedies to the “nature, severity, and extent” of the particular violations found. Member Kaplan, while concurring with the decision in part, wrote a pointed dissent disputing the extent of the remedies ordered by the Board and what he considered the majority’s overreach in its decision.  

Bargaining History and Previous Litigation  

For several years, UFCW Local No. 293 filed numerous ULP charges against the employer, alleging bad-faith bargaining that purportedly frustrated any possibility of arriving at agreement.  The unfair labor practice charges also included other allegations, such as retaliation against bargaining unit employees for their exercise of Section 7 rights.     

The Board previously sought a variety of remedies against the employer in court, including an injunction under Section 10(j), sanctions, and contempt findings.2 As a result of the Section 10(j) injunction, the parties briefly resumed bargaining in January 2020. During these bargaining sessions, the employer presented a last, best and final offer, which the Board concluded it issued without bargaining to impasse. The employer subsequently implemented this offer at the end of January 2020. The union filed additional unfair labor practices charges accusing the employer of, among other things, continuing its violations of the Act, including failing to bargain in good faith and continuing to frustrate bargaining.   

In a trial on the merits, the ALJ held that, based on a totality of the circumstances, the employer bargained in bad faith by: (1) proposing regressive proposals; (2) demonstrating unwillingness to consider even minor changes; (3) demonstrating a general unwillingness to consider most other union proposals; (4) adhering to most of its own initial proposals without modification; (5) demonstrating an unwillingness to wait for the union to make all of its proposals; and (6) making an unreasonable wage proposal.  Additionally, the ALJ found that the employer failed to demonstrate that a true impasse existed before it implemented its so-called last, best and final offer. 

For remedies, the ALJ ordered that the employer: (i) resume bargaining with the union; (ii) hold meetings, scheduled to occur at a time to ensure maximum attendance where a notice will be read to employees in both Spanish and English by the CEO, or, at the CEO’s option, by a Board agent in the CEO’s presence.  

The ALJ also ordered the employer to compensate the union for all bargaining expenses since November 2019 “through the date in the future when good faith negotiations begin.”  The employer appealed the decision to the Board. 

The Decision and Dissent

The Board not only upheld the ALJ’s remedies but also expanded them, taking the opportunity to explain the standards the Board will follow when imposing expanded and combined remedies.  The Board found that the variety and number of remedies ordered against the employer by the ALJ were warranted because of the multiple violations of the Act that the employer was found to have committed in prior proceedings.  In the Board’s view these violations, along with their “continuing deleterious effect on employee rights,” required multiple remedies to vindicate employee rights under the Act. 

To justify the remedies ordered, the Board asserted that the employer’s conduct had met each prong of the long-standing standard announced in Hickmott Foods, 242 NLRB 1357 (1959), deeming such remedies warranted – i.e., where “a respondent is shown to have a proclivity to violate the Act or has engaged in such egregious or widespread misconduct as to demonstrate a general disregard for the employees’ fundamental statutory rights.”    

The Board further held that the scope and nature of the remedies ordered by the ALJ are required to counteract the effect of the employer’s actions and its “hostility” toward its responsibilities under the Act on its employees.  The Board explained that, without the expanded remedies, employees will not understand that the Board’s order has restored their rights.

The Board also extended the “make whole” financial remedies in Thryv, Inc., 372 NLRB No. 22 (2022) to the bargaining context of this case, by amending the ALJ’s order to require the employer to compensate employees for “any other direct or foreseeable pecuniary harms incurred” as a result of their unlawful behavior. 

The majority asserted that its decision rests on the unique facts and circumstances of the case, to wit, the employer’s repeated and egregious violations.  The Board went on to explain that in other cases of repeat violations, it would “at least” consider the following remedies, and may fashion additional contours to the same, depending on the facts of the case:

  •  adding an explanation of rights to remedial orders;
  •  mandating a meeting where the notice is read and distributed to employees, along with an explanation of rights, and possibly requiring the participation of supervisors in those meetings;
  • mailing the notice and explanation of rights to workers’ homes;
  • requiring an official from the violating organization to sign the notice;
  •  publishing the notice with outlets that have broad circulation and local appeal;
  • extending the period during which notices must be posted;
  •  authorizing NLRB staffers to visit sites and determine compliance with the Board’s order(s); and
  • reimbursing bargaining expenses, including making whole any employees who lost wages by attending bargaining sessions.

Dissenting Member Kaplan agreed that the employer had violated the Act, but disagreed with the scope, tone and tenor of the majority’s decision.3 Calling the breadth of the decision “puzzling” and “troubling,” Kaplan stated the majority overreached. He also described the combination of some remedies, such as the mailing of the notice in addition to requiring a meeting where the notice would be read, “untethered from reality.”

Kaplan chastised the majority for, in essence, creating a conflict of interest in providing legal advice to the Office of the General Counsel about how to prosecute cases before the Board inasmuch as this conflicts with the Board’s adjudicatory role if and when the general counsel appears before it as a litigant.     

Kaplan also noted that the majority’s “treatise on extraordinary remedies” does not change Board law and described much of the decision that was not specific to the facts and circumstances of the litigants in this case as “dicta,” noting that the Board already holds broad power under Section 10(c).  Kaplan also made clear that he disagreed with forcing officials, such as company CEOs, to read notices inasmuch as it potentially violates First Amendment rights.  

Employers – Take Note

Noah’s Ark is in keeping with the trend of boosting the Board’s power to punish and deter violations of the Act.  While the Board cannot assess penalties, such as fees, or award punitive damages (as other agencies can), the Board does have the power to make aggrieved parties whole, which it has made clear it intends to do while interpreting the notion of make-whole remedies expansively.  Indeed, the NLRB Regional Offices and ALJs have expanded the remedies sought for alleged ULPs, including  economic remedies and notice requirements. The general counsel also made clear at the outset of her appointment that she would aggressively pursue cases to expand these remedies. 

Noah’s Ark is one of several recent decisions that address the Board’s power to impose remedies for violations of the Act.  Here, the Board uses the recent ruling in Thryv to increase monetary awards. In addition, the Board has also reinforced its ability under Section 10(c) to potentially require businesses to re-open in the event a business was closed to evade responsibilities under the Act.  The general counsel has also signaled she is looking for the appropriate case to bring before the Board to overturn a longstanding decision in Ex-Cell-0, which would empower the Board to order an employer to compensate individual employees if it has failed to bargain a first contract. The Board and the Office of the General Counsel have put employers on notice that remedies available under the Act are expanding and will be applied as strictly

Reminder:  Remedies Round-Up

Employers should understand the full nature of the remedies available in the event they receive unfair labor practice charges or are contemplating decisions that may arguably violate the Act.  The Board has been empowered by Congress in the NLRA to order make-whole remedies, such as reinstatement and backpay for discharged workers.  While punitive damages are not (yet) available under the NLRA, a full range of economic and information remedies is available under the Act.  

Economic Remedies

  • In cases where employees are illegally fired and/or discriminated against for engaging in protected, concerted activity as defined by the Act, the charging party is eligible for backpay (including wages and lost benefits) for the period of unemployment, as well as payment of dues, fines or other costs.
  • Due to the Thryv decision, these payments can also be expanded to include consequential damages or remedies for “derivative economic harm” to make employees whole for economic losses that were a “direct and foreseeable result” of the employer’s unfair labor practice.  These payments include, for example, awards for the payment of interest rates on credit cards used to cover expenses during a period of unemployment. 
  • In a departure from remedies available in employment discrimination litigation, employees under the Act have a right to reinstatement should they be terminated.  The employee can waive their right to reinstatement in exchange for front pay.  An offer of “re-instatement” does not “cut off” front pay damages – it is the employee’s option to be reinstated or receive front pay.  The agency will assess, as part of front pay, the availability of other work, if the employee has sought other jobs, etc.

Informational Remedies

Employers may be required, as part of a settlement agreement, to post notices that the employer promises not to violate the law in the future. 

  • The poster will generally include information about the Board and the NLRA, and employee rights and remedies under the same.
  • The postings communicate to the public (other workers) that the rights under the NLRA have been enforced and vindicated.

As noted above, any of these remedies could be expanded and/or combined depending on the particular facts and circumstances of the case, and the employer’s prior behavior. 

See Footnotes

1 Chair Lauren McFerran and Member David Prouty joined in the majority opinion.  Member Marvin Kaplan dissented in part. 

2 These remedies were upheld by the Board in 2021.  See Noah’s Ark Processors, LLC d/b/a WR Reserve, 370 NLRB No. 74 (2021), enfd. 31 F.4th 1097 (8th Cir. 2022).

3 Kaplan did agree that the employer should have to pay the bargaining expenses of the union.  Kaplan disagreed, however, with the order to pay employees for earnings they lost attending bargaining sessions (to the extent the employees were not already reimbursed by the union).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.